Gender diversity within the workforce in the microfinance industry in Africa: Economic performance and sustainability

Abstract

This study examines the relationship of gender diversity within the workforce and the sustainability of economic performance within the microfinance industry in Africa as compared to the rest of the world. Measuring economic performance helps to demonstrate whether resources are effectively utilized to achieve social performance objectives. We use ROA-the most common measure of profit for financial institutions-to capture financial performance, and OpEx-the most widely used indicator of efficiency-to capture operating efficiency. We measure gender diversity within the microfinance workforce at two hierarchical levels. Our analysis of a data set of 1,389 observations in 1,053 firms suggests that gender diversity enhances economic performance, especially in Africa. We propose that policymakers and practitioners consider these results to determine how to best deploy women within the microfinance workforce to deliver sustainable economic performance. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.Keywords: gender diversity, economic performance, sustainability Résumé Cette étude examine la relation entre la diversité des sexes au sein du personnel et la durabilité de la performance économique dans l'industrie de la microfinance en Afrique, par comparaison au reste du monde. La mesure de la performance économique permet de démontrer que les ressources sont efficacement utilisées pour atteindre les objectifs de la performance sociale. La ROA-la mesure la plus courante permettant d'évaluer le profit des institutions financières -est utilisée pour cerner la performance financière et l'OpEx-l'indicateur d'efficacité la plus répandue -est utilisée pour déterminer l'efficacité opérationnelle. L'étude montre que la mesure de la diversité des genres au sein du personnel de la microfinance s'opère à deux niveaux hiérarchiques. L'analyse de 1389 observations provenant de 1053 firmes indique que la diversité des genres améliore la performance économique, notamment en Afrique. L'article propose aux décideurs et aux gestionnaires de s'inspirer de nos résultats pour mieux déployer la gent féminin dans le personnel des microfinances afin d'atteindre des performances économiques durables.

Determinants of the Performance of Microfinance Institutions: A Systematic Review

“…(), Augustine et al . () and Vishwakarma () find evidence that having female board members is associated with better financial performance. Gohar and Batool (), Hartarska et al .…”

Determinants of the Performance of Microfinance Institutions: A Systematic Review

“…As microfinance is a business model in which the focus is on lending to the poor who in many cases happen to be women, this may be a potentially important topic. Augustine et al (2016), Bassem (2009), Chakrabarty andBass (2014), Strøm (2009), Strøm et al (2014) and Vishwakarma (2017) find evidence that having female board members is associated with better financial performance. Gohar and Batool (2015), Hartarska et al (2015), Mori et al (2015) and Périlleux and Szafarz (2015) find similar results when focusing on social performance of MFIs.…”

Participation of women in the South Asian microfinance industry: An observation

“…Regardless of organizational rank, women's participation should be emphasized as they could create significant impact in the achievement of organizational goals, which is often unnoticed (Augustine, Wheat, Jones, Baraldi, & Malgwi, 2016). Based on the organizational ladder of MFIs, women can participate in three different important management positions – board members, managers, and loan officers (see Figure 1).…”

“…Based on the organizational ladder of MFIs, women can participate in three different important management positions – board members, managers, and loan officers (see Figure 1). Behavioral economics suggest the presence of a variation in economic decisions between male and female (Hartarska, Nadolnyak, & Mersland, 2014), and that the effects of women on various dimensions of MFIs performance (e.g., financial sustainability & social outreach) were significantly positive in general (Augustine et al, 2016; Boubacar, 2019; Ghosh & Guha, 2019; Gudjonsson, Kristinsson, Gylfason, & Minelgaite, 2020; Strøm, D'Espallier, & Mersland, 2014).…”

“…In explaining the influence of females on the performance of MFIs, Augustine et al (2016) highlighted the similarity‐attraction hypothesis expanded and formalized by Byrne (1971), which states that most people are attracted, or are more comfortable with others who bear high similarities with them. In this context, similarity in terms of gender plays a pivotal role in microfinance operations.…”